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The federal government will today announce an extraordinary scheme to stimulate the economy by giving people $25,000 to renovate their homes or build a new house - but there are catches that will make many ineligible.  

Australians can get the cash sent directly to their bank accounts from Thursday under Scott Morrison's new 'HomeBuilder' scheme designed to rescue the country from its first recession in 29 years.

The grants are available for renovation works that cost between $150,000 and $750,000 and for new homes valued at less than $750,000.

Scott Morrison (pictured at the under-construction western Sydney Airport) will today announce an extraordinary scheme to give $25,000 cash grants for renovations

Renovations must improve the 'livibility' of the home, meaning swimming pools, tennis courts, outdoor spas and saunas, and detached sheds or garages do not count (stock image)

Renovations must improve the 'livibility' of the home, meaning swimming pools, tennis courts, outdoor spas and saunas, and detached sheds or garages do not count.

The house being renovated must not be valued at more than $1.5million and must be the applicant's primary residence, meaning investment properties do not qualify.  

To get the cash, applicants must earn less than $125,000 or be in a couple earning less than $200,000.

The applicant must pay a licensed builder the first installment for starting work and then can apply to their state or territory revenue office for the $25,000. 

After checking all the criteria is met, officials will transfer the cash directly into the applicant's chosen bank account. 

There are a number of restrictions on where the $25,000 can be spent. Those looking to build a new tennis court will be left disappointed (stock)  

The grants are available for renovation works that cost between $150,000 and $750,000. Pictured: A house being built in Cobbitty in Sydney

Prime Minister Scott Morrison said: 'If you've been putting off that renovation or new build, the extra $25,000 we're putting on the table along with record low interest rates means now's the time to get started.' 

In total, the policy is expected to cost $688million and provide work for 140,000 tradies and another 1million workers in the supply chain.

'This investment isn't just about helping Australians bring their dream home to life, it's about creating jobs and helping support the more than one million workers in the sector including builders, painters, plumbers and electricians across the country,' Mr Morrison said.

The scheme lasts from 4 June 2020 until 31 December 2020.  

Australians can get $25,000 sent directly into their bank account from Thursday under the Morrison government's new 'HomeBuilder' scheme 

The government has implemented strict criteria on who can do the building work after the Rudd government's so-called 'pink batts' scheme led to disaster.

The scheme, which gave grants for owners to install better home insulation after the financial crash of 2008, saw 10,000 new companies spring up to take advantage of the new work.

Hundreds of subcontractors and employees were doing dangerous work for which they were inadequately trained and four young men died, three from electrocution and one from dehydration.

To stop this happening again, the government has ruled that only building companies who held their license before June 4 can do the work.

To minimise fraud, builders must not be related to the home-owner and must offer the work at market value. This will be enforced by state and territory officials.   

'You've got to try and avoid the rorting and people taking advantage of it,' Mr Morrison told Sydney radio 2GB on Monday.

'Even though Australians have been amazing during this crisis, there's still those that will do the wrong things.' 

The government has decided to target the construction industry because it has been hammered by the coronavirus downturn. 

Half of new home builds and renovations have been cancelled or postponed as Aussies decide to preserve their cash.   

This far exceeds the 17 per cent reduction seen during the global financial crisis.

And dwelling investment is expected to decline by around 20 per cent through the June quarter. 

Treasurer Josh Frydenberg said: 'The housing and construction industry is vitally important to the Australian economy with dwelling investment worth more than $100 billion or around five per cent of GDP. 

Australians can get their hands on $25,000 to renovate their homes from Thursday

Pictured: A new home under construction in the western suburbs of Sydney

Mr Frydenberg added: 'The HomeBuilder program will support residential construction activity and jobs across the industry at a time when the economy and the sector needs it most.

'The Government's economic support measures including HomeBuilder are designed to be temporary, targeted and proportionate to the challenge we face so that we can ensure Australia bounces back stronger on the other side and without undermining the structural integrity of the Budget which Australians have worked so hard to restore.' 

Master Builders Australia chief executive Denita Wawn said the package would save small construction companies from a potential catastrophe. 

She said the inclusion of renovations to the scheme bypasses 'the red tape' of requesting planning approvals.  

Gross domestic product, also known as GDP, fell by 0.3 per cent in the March quarter as a result of COVID-19 and the summer bushfires, official national accounts data showed. Pictured is Treasurer Josh Frydenberg in Canberra on June 3, 2020

It comes after Mr Frydenberg on Wednesday became the first federal treasurer in three decades to confirm Australia is in recession - warning COVID-19 remained a threat to prosperity.

Gross domestic product, also known as GDP, fell by 0.3 per cent in the March quarter as a result of COVID-19 and the summer bushfires, official national accounts data showed.

Should the economy shrink again in the June quarter, Australia will officially be in recession for the first time since 1991, ending a world-record run of uninterrupted growth.

Mr Frydenberg confirmed Australia was likely already in recession.

'The answer to that is yes,' he said.  

'That is on the basis of the advice that I have from the Treasury department about where the June quarter is expected to be.'

Mr Frydenberg is the first Australian treasurer to confirm a recession since Labor's Paul Keating memorably said in late 1990: 'This is the recession that Australia had to have.' 

Official figures won't confirm a recession until September, when GDP data for the June quarter is released by the Australian Bureau of Statistics.

The March quarter contraction marked the first quarterly decline since early 2011 and only the fourth outside the last recession in 1991.

'We are not through this crisis and there will be some difficult days ahead,' Mr Frydenberg said. 

Mr Frydenberg, the Liberal Party's deputy leader, said the fact Australia's economy only contracted by 0.3 per cent in the March quarter was remarkable in itself, amid the COVID-19 crowd number restrictions and the bushfires.

'When one looks back on the March quarter, there wasn't much good news,' he said. 

'The fact the Australian economy only contracted by 0.3 per cent shows the Australian economy's remarkable resilience.' 

The Treasurer was confident the economy would rebound as COVID-19 restrictions were eased, despite government forecasts of a recession in 2020.

'As restrictions are eased, people can start to go out to the pub or to their shopping centre,' Mr Frydenberg said. 

'I think we will see consumption come back in accordance with improvements we've seen in consumer confidence.'

An apprentice carpenter at Holmesglen TAFE Chadstone campus in Melbourne, Monday. The policy will provide more than one million jobs

Master Builders Australia chief executive Denita Wawn said the package would save small construction companies from a potential catastrophe

Bruce Hockman, the chief economist at the Australian Bureau of Statistics, said Australia's annual growth pace of 1.4 per cent was the slowest since the GFC.

'This was the slowest through-the-year growth since September 2009 when Australia was in the midst of the Global Financial Crisis and captures just the beginning of the expected economic effects of COVID-19,' he said.

Most of the ABS data was collected before the March 23 shutdowns of non-essential businesses, ranging from gyms to cinemas and dine-in restaurants.

Social distancing measures hit consumer spending, which dived by 1.1 per cent in the March quarter.

Australia's national border was also closed on March 20 to slow the spread of coronavirus.